Appraisal myths debunked

Legally, a real estate appraiser must be state certified to produce legitimate appraisal reports for federally-supported sales. Also by law, you are allowed to request a copy of the completed appraisal from your lending agency. Contact Alpine Appraisal Services, Inc. if you have any concerns about the appraisal procedure.

Myth: Market value will be equivocal to the assessed value of the property.

Fact: It might be that Colorado, like most states, validates the common myth that the assessed value equals the market value; however, this is not often the case. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when homes in the area have not been reassessed for an prolonged time.

Myth: The opinion of value of a property will vary depending upon whether the appraisal is produced for the buyer or the seller.

Fact: There is no personal interest on the part of the appraiser in the outcome of the analysis, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is written.

Myth: Any time market value is found, it should be similar to the replacement cost of the home.

Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a specific home, with neither being under pressure to buy or sell. Replacement cost is the dollar amount required to rebuild a property in-kind.

Myth: There are certain methods that real estate appraisers use to determine the cost of a home, such as the price per square foot.

Fact: Appraisers make a comprehensive analysis of all factors pertaining to the value of a home, including its location, condition, size, proximity to facilities and recent opinion of value of comparable homes.

Myth: In a powerful economy - when the costs of homes in a given county are reported to be appreciating by a certain percentage - the values of individual homes in the proximity can be expected to appreciate by that same percentage.

Fact: Any value at which an appraiser concludes concerning a certain property is always personalized, based on certain factors pulled from the information of comparable properties and other specifications within the home itself. It makes no difference whether the economy is excellent or terrible.

Myth: Just seeing what the house looks like on its exterior gives a good idea of its cost.

Fact: Home worth is determined by a number of factors, including area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from just looking at the property from the outside.

Myth: Because consumers fund the appraisal when applying for loans to buy or refinance their property, they legally own their appraisal report.

Fact: Unless a lender releases its interest in the report, it is legally owned by the lending agency that purchased the appraisal. However, home buyers have to be given a copy of the report upon written request, under the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the appraisal so long as it meets the requirements of their lending agency.

Fact: A home buyer should definitely look through their report; there could be some questions or some concerns with the accuracy of the appraisal that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double as a record for the future, containing an exorbitant amount of information - including, but certainly not limited to the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, neighborhood description and a narrative of current real-estate activity and/or market trends in the area.